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What We Read Today 21 December 2014

Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.

Treasury sells entire Ally stake, ends auto rescue (Hailey Lee, CNBC)  The U.S. Treasury Department will sell its remaining 54.9 million shares of Ally Financial acquired under the government's bailout of the auto lender, Ally said on Thursday.  This is the final nail in the coffin that will bury TARP (Troubled Asset Relief Program of 2008).  According to this article TARP disbursed a total of $426.4 billion, mostly in late 2008 and early 2009.  Recovery by the government has been slightly larger than that, $441.7 billion.  So the total return on the nearly six-year program was 3.6%.

Early gift: Gas below $2 at some stations in 24 states (Wes Johnson, USA Today)  Lower gas prices and more highway traffic.  More on this 'behind the wall'.  Find the lowest gas prices anywhere you are in the U.S. every Monday evening on GEI News weekly gasoline report.


Suicide Surpasses War as Leading Cause of U.S. Military Deaths (Greg Zoroya, Reader Supported News) Hat tip to Rob Carter.  War was the leading cause of death in the military nearly every year between 2004 and 2011 until suicides became the top means of dying for troops in 2012 and 2013, according to a bar chart published two weeks ago in a monthly Pentagon medical statistical analysis journal.

military-deaths


Articles about events, conflicts and disease around the world

Ferguson and Related News

NSA / CIA

Ebola

Iran

Ukraine

Russia

North Korea

Norway

Cuba

China Investors Look to Index Reshuffle to Fuel Next Rally (Gregor Stuart Hunter, The Wall Street JournalMSCI Inc. and FTSE Inc. will decide in the first half of next year whether to include China in their global benchmarks.  If that happens Chinese stocks may get a big boost as international investors buy to fill out there indexed portfolios.  The chart below shows what happened to Taiwan and South Korea shares after they were added to the indexes.

stocks-taiwan-korea-1990-2014-600x480

But timing can be important.  In action that is similar to 'buy the rumor, sell the news', stocks in the UAE (Ubited Arab Emirates) and Qatar soared just before and following the announcement that those stock markets would be added to the MSCI Emerging Market Index, then flat-lined after the additions were actually made, before declining recently.  Of course the decline over the past three months was influenced by the crash in oil prices.

Dubai-AbuDhabi-Qatar-stock-markets-2012-2014-600x480


Credit Suisse cuts 2015 gold price, bullish on zinc (Mineweb)  Credits Suisse expects a trading range for gold in 2015 between $1,100 and $1,300 with a yearend target of $1,225.  They have lowered their long-term price from$1,300 to $1,250.  They expect lower mining supply and continued investment demand to keep support not far from $1,200.


Coal-ash dumps to face restrictions six years after billion-gallon spill in Tennessee (Joby Warrick, The Washington Post)  The EPA has announced more controls on coal ash sites but has stopped short of calling the material "hazardous".  This disappointed environmentalists and people living near the coal ash sites who have suffered from contaminated water supplies.  Coal ash, which contains significant amounts of arsenic, mercury and heavy metals, was exempted from federal waste-management regulations by Congress in the 1970s.  So it's not poisonous if lobbyists can get Congress to declare it is not hazardous.  Coal is a cheap fuel if you don't have to pay for the damage caused by its mining, burning and disposal.  We have yet to see anyone quantify that hidden cost.


China is Planning to Purge Foreign Technology and Replace With Homegrown Suppliers (Bloomberg News)  Companies like Cisco, IBM, Intel, Hewlett-Packard and Microsoft may suffer significant business losses if the world's second largest economy throws them out and uses homemade copies instead.  One of the reasons for China to make this move is national security.  They are distrustful of what hooks may be hidden in foreign-made technology.


Vehicle Miles Traveled: A Structural Change in Our Behavior (Doug Short, Advisor Perspectives dshort.com)  Doug Short contributes to GEI.  The motoring public is reacting to lower gasoline prices.  Mileage driven has been increasing since the end of 2011, but the rate of increase has picked up starting in the second quarter of this year and kept on growing as prices came down in the third and fourth quarters.

vehicle-miles-driven-2014-oct-600x457


Are Oil Prices Ready to Break out of the Trough? (Frank Holmes, U.S. Global Investors)  Frank Holmes has contributed to GEI.  Oil may be oversold but it is not quite to the historical extreme that could produce a major rebound.

oil-oscillator


IMF can’t stop worrying about Canada’s so-called housing bubble (Financial Post)  The IMF (International Monetary Fund) has said that Canada’s overheated housing market is likely to achieve a soft landing,  But they also say Canadian authorities may need to tighten mortgage rules further to contain vulnerabilities to a crash.

Canada avoided the housing market crash that accompanied the financial crisis in the United States. But a post-recession housing boom, fueled by record-low borrowing costs, has prompted some analysts to warn a bubble may be in the works.

home-price-to-income-ratio


Other Economics and Business Items of Note and Miscellanea

What Happened When Marissa Mayer Tried to Be Steve Jobs (The New York Times)

Super Saturday poised to eclipse Black Friday as top shopping day (Los Angeles Times)

Afternoon Must-Read: Alan Blinder: ‘What’s the Matter with Economics?’ Brad DeLong, Washington Center for Equitable Growth)

Why this Swiss bank whistleblower can't leave US (CNBC)  Hat tip to Marvin Clark.

Economics pushes many young adults to do without cars (Minneapolis Herald)

'Very Important' Ichthyosaur Fossil Discovered On UK Beach (International Business Times)

The Economics Of College Football Bowl Season (Forbes)

GST, Game-Changer For Politics and Economics (NDTV)  New tax in France - we're having trouble figuring it out.


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